I would ask first what the report actually tells us. A yearly revenue run rate came in about twenty billion dollars beneath what had been anticipated, and the market price of AI stocks fell sharply. The price tells us less than the arrangement of capital behind it. When a projected return fails to appear, the question is not whether the number is large or small, but how far distant the final returns are, and how many hands must wait upon them.
A capital employed in a nearer trade returns more often, and gives more encouragement to industry; a capital sent into a roundabout foreign trade of consumption must wait upon the returns of two or three distinct trades before it can be employed again. If the profits of those who deal in such goods are above their proper level, the goods are sold dearer than they ought to be, and the nearer employments are oppressed by this high price. The interest of those engaged requires that some stock be withdrawn from the nearer employments and turned towards the distant one, to reduce its profits to their proper level and the price of the goods to their natural price.
I would distinguish the guidance from the result. When by an increase in the effectual demand the market price of some commodity rises well above the natural price, those who supply that market are generally careful to conceal the change; if it were commonly known, the great profit would tempt so many new rivals that the price would soon be reduced. Secrets of this kind can seldom be long kept, and the extraordinary profit lasts very little longer than they are kept. The fall in the market price is therefore not a verdict on the enterprise itself, but a sign that the effectual demand has been supplied, or that the expected returns were more distant than the guidance implied.
